AP4 Presents Emissions Neutrality Roadmap

    Stockholm (NordSIP) – In line with several other similar commitments, AP4 announced its aim to achieve a net-zero emissions portfolio by 2040, at the latest. In its annual report, the Swedish public pension buffer fund reported it has cut the carbon footprint of its investments in the listed equities portfolio by half since 2010. AP4’s goal is to halve the carbon footprint once more by 2030 ahead of meeting the final deadline.

    The carbon footprint of AP4’s equities portfolio decreased by a further 15% during 2020 and is now less than half of what it is for a broad global equities index,” comments Niklas Ekvall, CEO of AP4 (Pictured). “During 2020 AP4 further advanced its positions in the areas of the climate and environment, and carried out a number of important initiatives. Among other things we have built a new fundamental, thematic global equities management, and we have started to use new, forward-looking data to assess how portfolio companies are acting in relation to the Paris Agreement. During the year an analysis of the climate transition and its impact on fossil fuel-based companies was conducted, and as a consequence of this, companies whose plans and targets are deemed to be not in line with the Paris Agreement have been divested from the portfolio.

    During 2020 we also broadened our application of low-carbon strategies to our entire internally managed global equities portfolio. This means that the target we set in 2015 ahead of the Paris summit – that the entire global equities portfolio would be managed based on strategies that result in a lower carbon footprint – has now been achieved,” Ekvall added.

    One challenge we encounter in refining our methods is access to data of sufficiently good quality. Up until last year we were forced to rely only on historical data that has not always been pertinent. In 2020 it became possible for us to complement our models with data that is more forward-looking and thereby has the potential to significantly increase our ability to forecast. More specifically, our strategies for selecting companies in the global equities portfolio now also include data on whether the companies are considered to be aligned with the Paris Agreement and on their ability to manage pricing of carbon emissions,” Ekvall concluded.

    Image courtesy of AP4

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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